GAAP net income was $178.3 million, or $0.29 per diluted share; non-GAAP net income was $217.0 million, or $0.35 per diluted share.

GAAP gross margin increased to 52.2 percent; non-GAAP gross margin increased to 52.5 percent from the second quarter's 51.9 percent. Both are records for the fifth consecutive quarter.

NVIDIA (NASDAQ: NVDA) today reported revenue of $1.07 billion for the third quarter of fiscal 2012 ended Oct. 30, 2011, up 4.9 percent from the prior quarter, and up 26.3 percent from $843.9 million in the same period a year earlier.

(in millions except per share data)

Q3 FY12
GAAP

Q2 FY12
GAAP

Q3 FY12
NON-GAAP

Q2 FY12
NON-GAAP

Revenue

$1,066.2

$1,016.5

$1,066.2

$1,016.5

Gross margin

52.2%

51.7%

52.5%

51.9%

Operating expenses

$359.6

$351.3

$317.6

$306.0

Net income

$178.3

$151.6

$217.0

$193.5

Earnings per share

$0.29

$0.25

$0.35

$0.32

On a GAAP basis, the company recorded net income of $178.3 million, or $0.29 per diluted share, for the third quarter of fiscal 2012. That compares with net income of $151.6 million, or $0.25 per diluted share, in the prior quarter and $84.9 million, or $0.15 per diluted share, in the same period a year earlier.

On a non-GAAP basis -- which excludes stock-based compensation, amortization of acquisition-related intangible assets, other acquisition related costs, and the tax impact associated with these items -- net income was $217.0 million, or $0.35 per diluted share. That compares with net income of $193.5 million, or $0.32 per diluted share, in the prior quarter, and net income of $117.4 million, $0.20 per share, in the same period a year earlier.

GAAP gross margin was 52.2 percent, a fifth consecutive record, compared with 51.7 percent in the previous quarter and 46.5 percent in the same period a year earlier. Non-GAAP gross margin, at 52.5 percent, was also a record, and compares with 51.9 percent in the prior quarter and 46.8 percent in the same period a year earlier.

"NVIDIA's strategy is coming into its own, as the world becomes increasingly visual and mobile," said Jen-Hsun Huang, president and chief executive of NVIDIA. "Our GPU business accelerated in the third quarter, driven by strong demand from gamers and the professional market. And our mobile business benefited from new devices coming onto the market. With Tegra 3 phone wins well ahead of Tegra 2's pace, we're expecting strong growth in the year ahead."

Outlook

Our outlook for the fourth quarter of fiscal 2012 is as follows:

Revenue is expected to be relatively flat, plus or minus two percent, from the third quarter.

GAAP and non-GAAP gross margins are expected to be flat to up 0.5 percentage points from the respective GAAP and non-GAAP gross margins in the third quarter.

GAAP operating expenses are expected to be approximately $372 million; non-GAAP operating expenses are expected to be approximately $330 million.

Our GAAP and non-GAAP tax rates are both expected to be between 14 to 16 percent, excluding any discrete tax events that may occur in the quarter.

We estimate depreciation and amortization for the fourth quarter to be approximately $53 million to $57 million. Capital expenditures are expected to be in the range of $30 to $40 million.

Diluted shares for the fourth quarter are expected to be approximately 618 million.

Third Quarter Fiscal 2012 and Recent Highlights:

NVIDIA launched Tegra 3, the world's first quad-core processor for super phones and tablets, bringing PC-class performance levels to tablets and phones. Simultaneously, Asus announced that its Eee Pad Transformer Prime, the first device based on Tegra 3, will be available worldwide in December.

NVIDIA Tesla processors were chosen by Oak Ridge National Laboratory, which will deploy 18,000 of them in its new machine, "Titan," expected to be the world's fastest supercomputer, with the potential to deliver speeds of over 20 petaflops.

CFO Commentary
Commentary on the quarter by Karen Burns, NVIDIA interim chief financial officer, is available at www.nvidia.com/ir.

Conference Call and webcast Information
NVIDIA will conduct a conference call with analysts and investors to discuss its third quarter fiscal 2012 financial results and current financial prospects today at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). To listen to the call, please dial (706) 679 2572. A live webcast (listen-only mode) of the conference call will be accessible at the NVIDIA investor relations web site www.nvidia.com/ir and at www.streetevents.com. The webcast will be recorded and available for replay until the company's conference call to discuss its financial results for its fourth quarter fiscal 2012.

Non-GAAP Measures
To supplement NVIDIA's Condensed Consolidated Statements of Operations and Condensed Consolidated Balance Sheets presented in accordance with GAAP, the company uses non-GAAP measures of certain components of financial performance. These non-GAAP measures include non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP income tax expense, non-GAAP net income, and non-GAAP net income, or earnings, per share. In order for NVIDIA's investors to be better able to compare its current results with those of previous periods, the company has shown a reconciliation of GAAP to non-GAAP financial measures. These reconciliations adjust the related GAAP financial measures to exclude a charge related to the weak die/packaging material set that was used in certain versions of the NVIDIA's previous generation MCP and GPU products, net of insurance reimbursement, stock-based compensation, amortization of acquisition-related intangible assets, other acquisition-related costs, and the associated tax impact of these items, where applicable. NVIDIA believes the presentation of its non-GAAP financial measures enhances the user's overall understanding of the company's historical financial performance. The presentation of the company's non-GAAP financial measures is not meant to be considered in isolation or as a substitute for the company's financial results prepared in accordance with GAAP, and our non-GAAP measures may be different from non-GAAP measures used by other companies.

Certain statements in this press release including, but not limited to statements as to: the company's strategy; the pace of Tegra 3 design wins; anticipated company growth in the year ahead; expectation that the world is becoming increasingly visual and mobile; the company's financial outlook for the fourth quarter of fiscal 2012; and the effects of the company's patents on modern computing are forward-looking statements that are subject to risks and uncertainties that could cause results to be materially different than expectations. Important factors that could cause actual results to differ materially include: global economic conditions; our reliance on third parties to manufacture, assemble, package and test our products; the impact of technological development and competition; development of new products and technologies or enhancements to our existing product and technologies; market acceptance of our products or our partners products; design, manufacturing or software defects; changes in consumer preferences or demands; changes in industry standards and interfaces; unexpected loss of performance of our products or technologies when integrated into systems; as well as other factors detailed from time to time in the reports NVIDIA files with the Securities and Exchange Commission, or SEC, including its Form 10-Q for the fiscal period ended July 31, 2011. Copies of reports filed with the SEC are posted on the company's website and are available from NVIDIA without charge. These forward-looking statements are not guarantees of future performance and speak only as of the date hereof, and, except as required by law, NVIDIA disclaims any obligation to update these forward-looking statements to reflect future events or circumstances.